MBA Purchase Applications – The index was down 9.0% last week as purchases fell 7.0% and refinances dropped 10.0%. Rates climbed slightly this week, up five basis points.
Jobless Claims – Initial claims were up 25,000 to 304,000 last week. Despite this, the four-week average was down 10,000 from this time a month ago. Meanwhile, continuing claims were down 51,000 to 2.354 million. The four-week average was down by 19,000 to 2.404 million.
Retail Sales – Retail sales were down 0.8% in January. This was largely due to the continuation of low gas prices, as sales were up 0.2% excluding automobiles and gas. Gas sales were down 9.3% month to month. Car sales were down 0.5%. There were increases in building materials and garden supplies, electronics and miscellaneous store retailers along with food and bars.
Consumer Sentiment – Consumer sentiment fell to 93.6 in the mid-month February reading, down from 98.1 at the end of January. It’s still the second-best reading in the last eight years. Current conditions dropped to 103.1 from 109.3. This is blamed on a potential slowing in consumer activity. The expectations outlook dropped from 91.0 to 87.5. There’s slightly less optimism about the prospects for jobs and income. One-year inflation expectations are up slightly to 2.8%, while five-year expectations were down one tenth at 2.7%.
Mortgage rates climbed on the improvement of other economic indicators.
30-year fixed-rate mortgages (FRMs) averaged 3.69% with an average 0.6 point for the week ending February 12, 2015, up from last week when they averaged 3.59%. A year ago at this time, 30-year FRMs averaged 4.28%.
15-year FRMs this week averaged 2.99% with an average 0.6 point, up from last week when they averaged 2.92%. A year ago at this time,15-year FRMs averaged 3.33%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.97% this week with an average 0.5 point, up from last week when they averaged 2.82%. A year ago, 5-year ARMs averaged 3.05%.
1-year Treasury-indexed ARMs averaged 2.42% this week with an average 0.4 point, up from last week when they averaged 2.39%. At this time last year, 1-year ARMs averaged 2.55%.
The Dow Jones Industrial Average closed at 18,019.35, up about 1.1% on the week after gaining 46.97 points Friday. It’s the first time the Dow has crossed 18,000 on the year. The S&P 500 gained 2.0% on the week climbing to a new record at 2,096.99 after being up 8.51 points Friday. The NASDAQ reached 4,893.84 gaining 36.22 points Friday. This is the NASDAQ’s highest level since March of 2000.
The Week Ahead
Tuesday, February 17
Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The Housing Market Index is a weighted average of separate diffusion indexes, including present sales of new homes, sales of new homes expected in the next six months, and traffic of prospective buyers in new homes.
Wednesday, February 18
MBA Purchase Applications (7:00 a.m. ET) – The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Housing Starts (8:30 a.m. ET) – A housing start is registered when the construction of a new residential building begins. The start of construction is defined as the beginning of excavation of the foundation for the building.
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in the prices received by domestic producers of goods and services.
Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production and the related capacity indexes and capacity utilization rates cover manufacturing, mining and electric and gas utilities.
Thursday, February 19
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time.
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